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Florida Keys Development Reaches Important Crossroads

Fri November 23, 2007 - Southeast Edition

KEY WEST, Fla. (AP) The sights and sounds at Schooner Wharf drip with Key West attitude: Sunburned tourists lounge near a marina, savoring drinks alongside locals wearing tank tops and sandals. A singer warbles, “I’d rather be here, drinking a beer, than freezing my a-- off up north.”

Different sounds emerge from behind the bar known as “The last little piece of Old Key West” — the sound of bulldozers working on a 32-unit luxury gated community. Pre-construction prices for spacious three-bedroom suites start at $1.87 million.

The Harbor House development will attract an upscale clientele seeking an island lifestyle. But its exclusivity clearly upsets some people here. Just read the writing scrawled on a retaining wall: “Stop the Madness.” “Money Talks.” “Eat the Rich.”

The Florida Keys are at a crossroads, beset by shortages of high-paying jobs and affordable housing, rising property taxes and insurance, and environmental concerns. Yet the move to “upscale” the Keys is gaining steam, a sign of growth that’s commonly experienced by tourism-dependent communities. Such growth is leaving many Keys residents feeling priced out or ignored.

“It seems like it’s paradise, but at the same time it’s an economic hardship for the residents,” said U.S. Rep. Ileana Ros-Lehtinen, R-Miami, who represents Monroe County. “That leads to this kind of twisted, complex relationship, sort of a marriage in therapy ... The Keys community and the tourists are always in couples therapy.”

Stretching south and west from Florida’s peninsula, the island chain is about 125 mi. long from Key Largo to Key West, connected to the mainland by the Overseas Highway (U.S. 1). Tourism is the economic engine, generating $1.7 billion in total sales in 2006. Visitors enjoy the warm waters surrounding the islands, which house rich fisheries and the only living barrier coral reef in the continental United States.

Dotted with trailer parks, hotels, campgrounds, marinas, retail shops and homes, the Keys attracted 2.25 million overnight visitors in 2006, according to the Monroe County Tourism Development Council. Day visitors, including Key West cruise ship passengers, add significantly to that total.

The Keys has a reputation for its tropical, laissez-faire lifestyle, where it once was possible for almost anyone — retirees and fishermen, hippies and lost souls — to move here with a little money, in search of paradise.

“This place will always be a Mecca for the square pegs,” said Michael McCloud, the sunglasses-wearing bar singer at Schooner Wharf.

The Keys’ population and popularity increased over the years, leading to more structures getting built on limited island land.

“Geography is the biggest imperative in understanding who and what we are,” said developer Pritam Singh, responsible for Key West projects such as Truman Annex.

When eight hurricanes struck Florida in 2004 and 2005, Keys visitors were asked to evacuate seven times, resulting in lost profits for hoteliers, charter fishermen and dive operators. Hurricane Wilma flooded homes and streets, but business owners questioned whether evacuations were necessary for weaker storms such as Tropical Storm Ernesto in 2006.

The active seasons led to higher hurricane insurance rates throughout Florida, where the bloated real estate market catapulted home prices. Skyrocketing property taxes and higher costs of gas, food, and rent has made life harder for those with low- and mid-incomes — teachers, police, firefighters, restaurant and hotel employees, and other workers that any community requires.

The median sales price of a single-family home was $700,000 in 2006, Monroe County statistics show. That’s nearly three times the $248,300 median price of an existing home in Florida in 2006, the Florida Association of Realtors reported.

“There is not enough industry here, not enough opportunity for well-paying jobs, relative to what it costs to live here,” said Bob Kelly, who has managed a shoe store, an art gallery and a rental property here.

These factors are likely reasons for a drop in population in the Keys, down 6 percent from 79,589 in 2000 to 74,737 in 2006, according to the U.S. Census. During that period, Florida’s population grew 13 percent.

Patti Julien works at a clinic in Marathon, about halfway down the Keys. She and dozens of others board buses at a Wal-Mart parking lot in Florida City, the final stop on the mainland, then endure a two-hour bus ride each way because they can’t afford living in the Keys.

Julien gets to the Wal-Mart about midnight, taking the day’s last bus from her home south of Miami. She then waits five hours because there’s no early bus to Florida City, and she’s scared she’ll miss her ride.

“I’d move to the Keys but I’d be paying $2,000 a month down there for a comparable duplex,” said Julien.

Monroe County leads Florida in average annual salary for teachers with a bachelor’s degree at $47,687, but retention is a problem, with the district replacing about 100 teachers out of 600 every year, said schools superintendent Randy Acevedo. Some don’t leave, but they might take second jobs.

“I can go out to dinner with the family and the waiter or waitress might be a teacher,” Acevedo said.

Efforts to improve the quality of life here include plans to add affordable housing in Key West, Marathon and other cities. Marathon Mayor Chris Bull is joining forces with Ros-Lehtinen to secure funds for improving water quality. Storm runoff, untreated sewage and pollution threaten the economically vital reef system.

In 2000, Congress authorized $100 million in water quality improvements. An Oct. 1 letter to President Bush signed by six Florida members of Congress requests $29 million of that in the 2009 budget.

“We’re definitely in a critical stage of Keys development,” Bull said.

A theory called the Tourism Area Life Cycle describes the stages of growth in areas like Key West as exploration, involvement, development, consolidation and stagnation, according to scholar Richard Butler. After stagnation, communities can decline or rejuvenate.

The Keys seem headed toward consolidation, where expensive hotels and vacation rentals replace older motels, where a Starbucks could replace a mom-and-pop coffee shop — generating ill feelings in the process. In a 2004 survey, 73 percent of Key West respondents said development was a threat to the city’s character and culture.

Locals “get the feel that you are losing control of your community. Locals begin to feel ineffective,” Butler said.

Bob Bernreuter closed The Deli, a favorite for 56 years, after losing business because of the hurricanes and competition from other restaurants. Bernreuter estimated there are more than 400 restaurants in Key West — a lot for a population of about 25,000.

Bernreuter said he did not want to raise prices and alienate regulars who enjoyed affordable breakfasts and fresh seafood, and no one in his family was going to take over.

“You don’t have as many families coming down here anymore who would have met the price structure for the restaurant,” he said.

Developers like Singh are leading the upscaling of the Keys. One project is Parrot Key, a 74-unit resort offering multiple bedroom units, with amenities such as kitchens, flat screen TVs and iPod docking stations, for $400 to $500 a night. The location is where a Hampton Inn once stood, with simpler rooms at one-fifth the price.

Singh said it’s critical for Key West to replace older properties. Fancier vacation rentals keep tourism competitive and profitable, he said.

Harbor House developer KeysCaribbean Resorts said the Key West-style architecture of its homes and rentals would preserve the area’s quaintness. A previous design drew neighbors’ ire, and the developers changed it.

“There was some pretty ramshackle buildings on that ground,” said KeysCaribbean chief executive Craig Hunt. “It will look way better than it was.”

Sitting in a restaurant near Schooner Wharf and Harbor House, longtime Key Wester John Mertz laments the current trends.

Expensive vacation rentals price out tightfisted travelers, such as families, he said, while out-of-towners buy pricey second homes. Locals lose waterfront access because the best properties end up in developers’ hands.

“When I first moved here it was very egalitarian,” Mertz said. “Now there’s more of a class distinction — the obscenely rich and their servants. It can become a horrible thing, sort of like a monopolistic Disney World controlled by just a few that don’t really live here.”

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